Jobs will be saved at Grangemouth after Britain’s largest chemical plant received a government lifeline.

Ineos, the business empire owned by Manchester United investor Jim Ratcliffe, had looked at closing the ethylene plant at Grangemouth where it has recently shut the oil refinery with the loss of 430 jobs. 

The Government has now stepped in to provide financial support for the ethylene plant that will protect 500 jobs.

The deal is worth £150m and is made up of a £75m loan guarantee financed by Ineos through NatWest, a £50m grant from the UK government and £25m equity also provided by Ineos.

UK Business Secretary Peter Kyle will formally announce the funding during a visit to the INEOS site in Grangemouth on Wednesday along with the Chancellor Rachel Reeves and Scotland Secretary Douglas Alexander.

The funding will help improve energy efficiency, reduce carbon emissions and increase productivity. INEOS has spent over £100m over the last year maintaining operations at the site.

It produces ethylene which is essential for medical-grade plastics and use in the chemical supply chain. These plastics are also vital to key industries, including advanced manufacturing, automotive, and aerospace, where they are used in nearly every product.

The site had been at risk of closure due to high carbon taxes foisted on manufacturers.

Ratcliffe, who has criticised the UK government’s tax plans and announced he is investing in the US, said: “UK government support for Ineos’s investment shows the strategic importance of making things in Britain” adding that it “preserves the industrial capability the nation needs”.

ExxonMobil recently announced plans to close its Mossmorran ethylene plant in Fife in February, with 179 staff facing redundancy and another 250 contractors affected. Its managers will face MPs on the Scottish Affairs Committee on Wednesday.

Last week it was announced that around 310 jobs will be supported over the next five years by the Scottish company MiAlgae, that has started construction on its first commercial scale manufacturing facility that will transform whisky waste into fish-free Omega 3 following £3m in UK and Scottish government backing.

UPDATE 17 DEC: Explaining why government support was not available to ExxonMobil, Douglas Alexander, the Scotland Secretary, today said the Mossmorran plant had suffered from a lack of investment and the management could not provide a “pathway to profitability”.

“It was a very difficult approach from ExxonMobil,” he said. “The Mossmorran facility is now 40 years old, it was built to have a 20 year lifecycle.

“Alas, there hasn’t been the scale of investment that many of us would wished to see in Mossmorran over recent years”.

Contrary to Mr Alexander’s comments, Unite officer Bob MacGregor, today said there had been £100m of investment in the plant over five years. ExxonMobil chair Paul Greenwood later said this was £270m.

Mr MacGregor told MPs on the Scottish Affairs Committee in the Commons that he wanted ExxonMobil to pause its closure plans to allow more talks with potential buyers.

He said that beyond “kind words and soundbites” there was little tangible evidence of support from either the Scottish or UK governments to save the plant.

Mr MacGregor was also scathing about the “just transition”. Having spoken to workers he said “no one is helping oil and gas. It is a myth, to be honest.”

See: Mossmorran ‘undermined by green policies’